This disclosure relates to processing electronic signals associated with a payment network, and more specifically to transmitting funds from a commercial financial account as disbursements from a payor to one or more payees.
When a payor, such as an insurance company, makes a disbursement, such as a payout to an insurance policy holder, the payor's bank account, from which the funds are to be transferred, must have sufficient funds before the funds transfer takes place. The party performing the funds transfer, for example the payor's bank or a third party processor acting on behalf of the payor's bank, is a disbursement service provider. Before making the transfer, the disbursement service provider attempts to verify that sufficient funds exist in the payor's bank account using a manual (i.e., not automatic) process. For example, in some known systems where the disbursement service provider is a third party, the disbursement service provider manually exchanges notifications to and from the payor's bank to check the balance of the bank account. The disbursement service provider's manual method of attempting to check the account balance prior to initiating the transfer is error prone and may not be coordinated with the timing of the funds transfer. In situations where the payor is making many disbursements throughout a day, the likelihood of the disbursement service provider mistakenly initiating a funds transfer from the payor's bank account when insufficient funds are available increases. The payor's bank is liable for any overdrafts that might occur as a result. Further, in at least some known systems, payors maintain excess funds in their bank accounts to guard against an overdraft, when those excess funds could be used elsewhere.